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EPIC --- Privacy and Human Rights Report 2006

Interactive Television and Online Video

The convergence of communications networks, computers and mass media into an interactive network combining television and the Internet is the next progression of the technology currently being developed. New boxes are replacing the traditional cable TV set-top box with an interactive device that also includes the functions of a limited personal computer and video recorder. At the same time, personal computers are regularly equipped with TV tuner cards to handle advanced video operations and handheld devices and cell phones are gaining streaming TV functionality. Moreover, there has been explosive growth in the field of online video services and user created content.

The designers of these new appliances paint a pleasant picture of the conveniences that will be available with these new systems. They anticipate that viewers will be able to make spur of the moment purchases through their boxes, based on what their favorite star is wearing or on an individually tailored ad that appears between shows. Communities will be formed as people chat live about the plots of their favorite shows or sporting events. Vast libraries of movies and shows will be available for renting on demand by simply pressing a button on the remote control. The industry calls this "T-Commerce" for Television Commerce.

Interactivity has been the dream of the television industry since the invention of the TV. For several decades, there have been a series of expensive tests that have failed because the technology has been crude and expensive.[527] The change that now makes Interactive Television (ITV) possible is the evolution of the Internet and the advancement of digital television, which is also referred to as Internet Protocol television or IPTV.[528] The protocols underlying the Internet are now being used to allow for interactive high-speed access over existing cable lines. Intelligent cable TV boxes, which connect to broadband and interactive cable systems, are increasingly being deployed. Although efforts to attract sizable numbers of subscribers to ITV services have yet to yield outstanding results, experts expect the industry to boom in the near future. Recently, the major cable operators have shifted focus from advanced interactive services, such as access to stock quotes or viewer control of camera angles, to providing video-on-demand and digital video recording (DVR) services.[529]

Popular use of enhanced digital television services was originally limited to the United States and the United Kingdom,[530] but experts recently have seen large growth on an international scale.[531] Market researchers found that 11.2 percent of US households owned a DVR in 2006, while Nielsen Co. had the number as high as 17 percent of US households.[532] DVR devices allow users to peruse and rewind live television shows, while they automatically record television shows for viewers and make recommendations for new shows based on viewers' previous behavior.

Unlike personal computers that give users control over their actions and choices, the new ITV systems are generally based on a sealed "black box" controlled by the company that gives the user little or no control. In the MSNTV (formerly WebTV) box, users are not able to refuse cookies and must request a special tool to view and delete cookies. Although the popular TiVo system gives its premium users the option to opt out of sending anonymous data, the basic service does not allow users to do so.[533] Most systems are closed and it is difficult for even advanced users to identify what the system is doing. It will also prevent users from being able to use their own software.

There are other significant differences in that the media is more top-down, and corporate than the Internet, which is decentralized and allows nearly any user to set up his own Web site and become a content producer. In the past, many ITV providers described their systems as "closed gardens" that will only show content in which the providers have a financial interest. Moving away from this concept, UK satellite broadcaster Sky recently announced plans to introduce a new interactive TV portal that will allow greater access to interactive TV. The new portal lowers the barriers to entry by allowing publishers of sites to register and launch a site for no charge, opening up the possibilities for a wide range of online providers. For a fee, publishers will be able to promote their site on the portal and register a code to allow easy access to their site.[534] Furthermore, access on portable devices like the recent generation of cell phones, and set-top boxes like the Apple TV, makes it simple for anybody with an Internet connection to upload personal content to services like YouTube and Current TV and essentially be the programmer of their own personal television channel.

Privacy issues arise both in the consumption of content and the creation of content. Video content is currently distributed using a variety of different hosting solutions. Users can post them on personal domains, trade them on peer-to-peer networks like the Bit Torrent protocol, or upload them to a variety of different services like YouTube, Google Video, Revver, Vimeo, Grouper, Dailymotion, and many more,[535] Content creators can even upload videos instantly from mobile technology and provide commentary on mundane daily occurrences, or important current events. Stickam, a company that provides over 600,000 users with live video chats utilizing their Web cameras, has been criticized for exposing teenage users to unfiltered broadcasts.[536] And, it’s estimated that 62% of online content viewed by 21-year-olds has been created by someone within their social network.[537] It’s clear that people are increasingly consuming media created by their peers.

The wide use of Web sites with user created content has lead many media conglomerates to invest and acquire online destinations. From News Corp.’s purchase of MySpace for $580 million in 2005, to Google’s purchase of YouTube $1.58 billion in 2006,[538] companies are looking to monetize Web site audiences. Currently, there are five different economic models being implemented to gain income from online video outlets: voluntary donations, charging viewers for service, advertising, licensing to third parties, and direct online sales.[539]

In all of these models, user privacy can be compromised as companies look to maximize revenue through targeted advertising techniques and intrusive profiling. Analysts predict that a company like Google could see revenue of $500 million a quarter by simply placing advertisements directly inside YouTube video streams.[540] Furthermore, the information posted by users onto these sites often contains intimate details of their daily life. These sites usually retain the data as a valuable corporate asset in case of merger or acquisition, making it easily releasable for law enforcement purposes, and exposing users to potential identity theft in the event of data leakage.

In addition to the traditional set-top boxes, handheld devices, and online computer media, some video game consoles provide an Internet access functionality[541] that requires subscribers to register much of their personal information (name, address, telephone number, e-mail address, credit card number, etc.). The game console's hard disk also records all the games played and their patterns, names of all the players involved in a game, scores obtained, and other similar information, and transmits the data to the console manufacturer the next time the player connects. The next generation consoles (Xbox 360, PlayStation 3 and Nintendo Wii) threaten to oust interactive TV set-top boxes from the center of home entertainment by offering, in addition to games, the same services as set-top boxes: personal video recorders (such as TiVo and ReplayTV), e-commerce, e-mail, web access, photo albums, DVDs, home movies and music.

In response to the growing popularity of digital television, the US Federal Communications Commission (FCC) attempted to regulate the use of digital content by adopting a broadcast flag mandate. The flag works by sending a set of status bits, or "flags," in a data stream of digital programming to compatible digital receivers that define the uses of the content. The flag may indicate that certain programming is not recordable, prevent skipping of commercials, or prohibit the program from being saved on digital video recorders.[542] The broadcast flag was set to go into effect by July 2005 but the District of Columbia Circuit Court struck it down, stating that the FCC exceeded its authority by creating this rule.[543] This issue continues to reappear in legislation only to be met with opposition from privacy activists.

Civil liberties advocates are critical of the broadcast flag because it creates strong incentives to use privacy-invasive copy protection to enforce the interests of the content industry. By tracking the viewing habits of a consumer, content providers may overstep the boundaries established by the Cable Communications Policy Act and the Video Privacy Protection Act. To address these concerns, advocates called for incorporation of privacy requirements into the mandate.[544] Because the FCC's rule was ultimately struck down, the repercussions on personal privacy have yet to surface. However, most digital receivers are currently outfitted with this technology and the possibility remains that Congress will grant the FCC the authority to create this regulation or that a higher court will overturn the ruling.

[527] L. J. Davis, The Billionaire Shell Game: How Cable Baron John Malone and Assorted Corporate Titans Invented a Future Nobody Wanted (1998).
[528] Marguerite Reardon, “IPTV chugs along”, CNET News.com, June 18, 2007 <http://news.com.com/IPTV+chugs+along/2100-1034_3-6191378.html?tag=item>.
[529] See Jane Weaver, "Interactive TV Struggles to Connect," February 25, 2004 <http://www.msnbc.msn.com/id/3073178/>.

[530] Australian Market & Social Research Society, "The Future of Audience Measurement," June 2005 <http://www.mrsa.com.au/index.cfm?a=detail&id=1794&eid=112>.
[531] New Millenium Research Council, “The State of IPTV 2006: The Advent of Personalized Programming,” June 2006 <http://www.newmillenniumresearch.org/archive/IPTV_Report_060706.pdf>.
[532] Mediamark Research Inc., “Adults with Digital Video Recorders Upscale and Print-Oriented,” July 26, 2006 <http://www.mediamark.com/PDF/Adults with Digital Video Recorders Up-scale and Print Oriented.pdf>; Laura Petrecca and Theresa Howard, “DVR viewers push ad ratings up,” USA TODAY, June 3, 2007 <http://www.usatoday.com/money/media/2007-06-01-nielsens-usat_N.htm>.

[533] TiVo, TiVo Privacy Policy, May 2006 <http://www.tivo.com/abouttivo/policies/tivoprivacypolicy.html>.

[534] "Sky Opens Platform to Internet on Interactive TV," June 16, 2005 <http://informitv.com/articles/2005/06/16/skyopensplatform/>.

[535] Organisation for Economic Co-operation and Development, “Participative Web: User-Created Content”, April 12, 2007, p. 17.
[536] Brad Stone, “Accuser Says Web Site for Teenagers Has X-Rated Link,” NY Times, July 11, 2007, available at <http://www.nytimes.com/2007/07/11/technology/11video.html?pagewanted=1&_r=1>.
[537] OECD, supra, at 12.

[538] Id. at 23.
[539] Id. at 24-27.

[540] John Letzing, “Google expected to post double-digit profit, sales gains,” MarketWatch, July 12, 2007, available at <http://www.marketwatch.com/news/story/google-expected-post-double-digit-profit/story.aspx?guid=%7B80F49FF9-C863-40C6-AFF8-ED833035C252%7D>.

[541] E.g., Microsoft Xbox Live system and Sony PlayStation 2 online access module.

[542] See generally Declan McCullagh, "Court Yanks Down FCC’s Broadcast Flag," CNet News, May 6, 2005 <http://news.com.com/Court+says+FCCs+broadcast+flag+is+toast/2100-1030_3-5697719.html> (discussing the broadcast flag and the recent court decision).
[543] American Library Assoc'n v. FCC, 406 F.3d 689 (D.C. Cir. 2005).

[544] See Comments of the Electronic Privacy Information Center, In re Digital Broadcast Copy Protection before the Federal Communications Commission, December 6, 2002 (No. 02-230), available at <http://www.epic.org/privacy/drm/broadcastflagcomments.html>.